Japanese Stocks Plunge Triggers Circuit Breaker—Why Are Analysts Still Bullish?  

TradingKey - Japanese stocks plummeted, triggering a trading halt, but analyst Jason Tang remains optimistic about their outlook.  

Monday was a dark day for Japanese equities, with markets opening sharply lower and continuing to slide throughout the session. The Nikkei 225 index plunged more than 8% intraday, reaching its lowest level since October 2023, while the broader TOPIX index dropped over 12%. 

The steep sell-off triggered circuit breakers for both Nikkei 225 and TOPIX futures, leading to a temporary suspension in trading.  

Since the beginning of the year, Japanese stocks have been on a downward trajectory, with the Nikkei 225 falling more than 20% and the TOPIX losing approximately 18%, severely undermining investor confidence.  

Nikkei 225 Price Chart, Source: Google.

According to analysts at Nikkei, the bottom for Japanese stocks remains uncertain, with   further volatility or declines possible. They noted, "It may take more time for the market to truly find its bottom."

In contrast to this cautious view, TradingKey analyst Jason Tang remains bullish on Japanese equities.  Tang explained, "The decline in Japanese stocks is driven by multiple factors, including Trump’s foreign policies, spillover effects from the U.S. economic slowdown, the impact of falling U.S. tech stocks, and the Bank of Japan’s rate hikes—with Trump’s tariff measures being the most critical factor."

He added, "As the headwinds from tariffs fade, potential negative effects remain manageable, and Japan’s economy recovers, we remain optimistic about the Japanese stock market."